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Study: Cyber Crime By Criminal Insiders and Employees on the Rise


Study Cyber Crime By Criminal Insiders and Employees on the RiseInsider Threats Pose Challenges for IT

A study released by the Ponemon Institute in February reveals that insider threat has become more of a challenge for IT professionals at companies throughout the U.S. And, although the number of employee-related incidents of fraud continues to remain high, only 44% of those surveyed say their organization views the prevention of insider fraud as a top security priority.

Adding to this insider risk is BYOD (Bring Your Own Device), whereby employees have access of enterprise systems from remote locations (though mobile devices – smart phones, tablets and laptops) without the proper security protocols.

Furthermore, according to the Ponemon Institute’s research, insider negligence (employees, contractors, and other third parties) and maliciousness can be one of the major causes of a costly and reputation-damaging data breach. While the average cost of a data breach in the study was $194 per lost or stolen record, companies that experience malicious or criminal attacks have a per capita cost above the mean at $222.

The objective of such insider attacks is typically the theft of financial or information assets. This includes customer data, trade secrets and intellectual properties. The report indicates that in some cases the most dangerous insiders are those who possess strong IT skills or have access to an organization’s critical applications and data. Other risks with potentially severe consequences are the intentional misuse of data or policy violation.

Some of the most important findings of the study include:

  • Organizations on average have had approximately 55 employee-related incidents of fraud in the past 12 months. What’s more, over the past 12 to 24 months, 33% say the risk has worsened (versus 23% in last year’s study) and 51% say it has remained the same (versus 62% in last year’s study).
  • More than one-third of survey participants say that employees’ use of personally owned mobile devices has resulted in malware and virus infections that infiltrated their corporate networks and enterprise systems and another 26% say it’s very likely to occur.
  • Sixty-one percent rate the threat of insider risk within their organization as very high or high.
  • Twenty-three percent say insider fraud incidents existed six months or longer before being discovered and 9% could not determine when they occurred.
  • Fifty-five percent of organizations say their organization does not have the ability/intelligence to determine if the off-site employee’s non-compliance is due to negligence or fraud.

Combating insider fraud is challenging. According to the Ponemon report, it takes 87 days on average to first recognize that insider fraud has occurred and more than three months (105 days) to get at the root cause of the insider fraud incident and to determine the consequences to the organization. What’s more, other challenges among companies in preventing cyber crime include: employee awareness, executive-level priority, resources and available technologies. The threats most difficult to secure are mobile devices, outsourced relationships (including cloud) and applications. The bottom line: Employee education and policies need to be implemented and supported by enterprise fraud management.

At Axis Insurance Services, LLC, we have the experience and expertise needed in helping our clients develop a risk management program that combines security controls and properly structured insurance cyber crime policies. We will help identify threats and design a program specific to your company’s needs. Give us a call at (877) 787-5258.

Source: Ponemon Institute

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Blogged on: April 10, 2013 by Mike Smith
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